Agoura Hill, Calif. & Scottsdale, Ariz.—To American Homes 4 Rent and American Residential Properties, size does matter. They’ve announced today that the boards of both companies have approved an agreement to combine in a tax-free merger enhancing the size of the largest publicly traded single-family rental company. The total transaction value is approximately $1.5 billion.

American Residential will add 8,938 residences to American Homes’ stock of 38,377 single-family properties for a total of more than 47,000 homes in 22 states, and a geographic overlap that is expected to provide notable scale advantages.

Barclays is serving as the lead financial advisor to American Residential Properties with Raymond James also servicing as financial advisor, and Hunton & Williams is serving as its legal counsel. Hogan Lovells US is serving as legal counsel to American Homes 4 Rent.

Stephen G. Schmitz and Laurie Hawkes, CEO and COO of American Residential

American Homes will retain its corporate headquarters in Agoura Hills, Calif., while maintaining a presence in the Phoenix, Ariz., market. American Residential Properties’ chairman and CEO, Stephen G. Schmitz, and its president and COO, Laurie Hawkes, will remain with the company until completion of the merger.

The merger is subject to approval of American Residential Properties stockholders and to customary closing conditions. Schmitz and Hawkes have agreed to vote their shares in favor of the merger. The merger is expected to close during the first half of 2016.

“American Residential Properties has a high-quality portfolio of homes which fit strategically in our markets, offering significant opportunities to capture further operating efficiencies on the combined platform,” David Singelyn, CEO of American Homes, said.

The resulting entity will have an equity market capitalization of $5.5 billion.